More people think house prices will fall during the coming year than those who think they will rise, a survey showed today.
Around 32 per cent of potential buyers think the value of property will fall during the coming 12 months, with only 27 per cent optimistic that prices will be higher a year from now, according to property website Rightmove.
A further 36 per cent of people planning a move think the housing market will stagnate during the coming year and prices will be unchanged.
The situation represents a significant turnaround from this time last year, when the number of people who thought house prices would rise out numbered those who predicted a fall by five to one.
Miles Shipside, director of Rightmove, said: “This time last year 56 per cent of respondents to our survey asserted that house prices would be higher in a years’ time and that proved to be an accurate forecast.
“However, this quarter the majority is gone and opinion is divided. It’s unusual to see such a split, but it shows that current economic uncertainty is forcing people to take sides in their view of the housing market.
“When sentiment is split as it is, or when there is no clear and prevailing view, a typical reaction from potential home-movers is ‘no action’.”
While potential buyers are currently being constrained by a lack of mortgage availability, the survey suggested they were also holding back from making a decision due to other concerns.
Around 27 per cent of people who think prices will be lower in a year’s time said they were concerned about the economic situation, while 20 per cent are worried about a squeeze on household incomes.
But a third of those who think prices will be higher, cited confidence in the economy as the main reason for their optimism.
Mr Shipside said: “After months of speculation, the realities of the Government’s Comprehensive Spending Review are upon us and it is clear from this survey that the success or failure of the cuts in the wider economy will have a big impact on the property market.”